Answer to Question #263304 in Finance for olga

Question #263304

As an expert, advise on finance decision issues on equity and loan funds.

Explain the concept of “gearing” and its impact on a business. 


1
Expert's answer
2021-11-09T17:50:36-0500

The gearing ratio is a metric that measures a company's financial risk. A company's financial health can be jeopardized if it has too much debt. A high gearing ratio indicates a high debt-to-equity ratio, whilst a low gearing ratio indicates the reverse.


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